"It is very easy to go wrong in fashion," says Howard Davidowitz, a retail consultant. Gap, a fashion retailer that was once one of corporate America's shining success stories, used to get everything right. Its affordable, trendy clothes epitomised casual cool. But not any more. The company's production cycles are too slow to keep pace with rivals, prices have risen and the brand has lost its shine. In 29 of the past 31 months Gap reported flat or declining same-store sales. Senior executives are quitting in droves. Profit margins, at 6.5%, are about half the industry's average. In December, traditionally the busiest month for shopping, same-store sales were 8% lower than in December 2005. Gap is now said to have hired Goldman Sachs, an investment bank, to evaluate its options.
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